The first day of summer is here! What was May like for the US stock indices? And, most importantly, what should we expect next?
HSBC: "outlook for GBP is not promising"
Information is not investment advice
HSBC wrote in its regular monthly forecast that "the outlook for GBP is not promising, in our view, given the broader underlying flow dynamics". The common consensus was that the pound would rally after the signing of an EU-UK trade deal. However, HSBC thinks oppositely.
The Bank of America agrees with HSBC and points to the cheapness of UK assets in comparison to EU and US. Besides, the pound exchange rates are significantly lower than they were before the EU referendum results in June 2016.
HSBC forecasts GBP/USD will be trading at 1.3400 through this year, while EUR/GBP will rise to 0.94.
EUR/GBP is touching the dips now, therefore we could expect the pair to rise soon. On the weekly chart, the downside is limited by the 100- and 200-period moving averages at 0.8840. Let’s get a closer look and analyze the 4-hour chart. We see that the pair is heading towards 0.8400 at the lower line of the Bollinger Bands indicator, which the pair is unlikely to cross. Therefore, we can expect the pullback to the upside from this level. On the way up, the pair will meet resistance levels at Monday’s high of 0.8885 and the high of January 22 at 0.8920.
The world’s largest oil exporters, OPEC+ nations, will meet on Tuesday. The meeting is expected to start at 15:30 GMT+3.
Despite the lack of demand in the oil market in recent months, Goldman Sachs expects the oil prices to go higher. Why?
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